Guaranteed Life Insurance Policies
Guaranteed Life insurance policies are a specific type of final expense policy. Final expense policies are also known
as burial insurance and funeral insurance policies. They are
designed to pay for an individual's funeral and final expenses including any outstanding
household bills. The benefit amount for final expense policies is typically
$25,000 or less. While a maximum benefit
of $25,000 might not be enough to provide for surviving family members, it is
certainly enough to pay for the policyholder's final expenses including
any funeral, cemetery (or cremation) cost and a luncheon for
mourners. For individuals and couples with adult children, these
policies are a perfect way to be sure that their children (or grand
children) are not burdened by the cost of a funeral.
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The first step in deciding on a final expense policy is estimating burial insurance needs. In 2013 the cost of the average traditional funeral was $9,600. Keep in mind this is the average cost. Funeral cost will vary a great deal depending on the arrangements. A very simple burial may cost less than $4,000 dollars, while more elaborate funerals can cost over $15,000. However since it can take a great deal of time to price specific funeral arrangements and options, most people simply use the national average rounded up and approximate funeral cost of $10,000.
Guaranteed Life Insurance policies do not require underwriting. These policies are issued regardless of an applicant's health, occupation, driving record or other risk factors. In other words the policy is guaranteed to be issued as long as the application is completed and the premium is paid. As with any life insurance, the premium increases with the age of the applicant. So a 75 year old will pay more for a guaranteed life policy than a 55 year old. However an applicant with serious health issues will pay the same premium as a healthy applicant of the same age.
Since no health questions are asked, No medical exam is required, and everyone that applies is accepted, these policies have a graded benefit period. This means that during the first two years of coverage, the full benefit is only paid for accidental death. If an insured person dies of disease or illness, in the first two years of coverage, the benefit is limited to the premium paid. After the first two years, the full benefit amount is paid for death from any cause including illness, accident, or natural causes.
Guaranteed Life Insurance policies are often a good option for people with health issues, since they are likely to be turned down for standard term and whole life policies. As long as they are within the eligible ages, they cannot be turned down or cancelled for a guaranteed life policy unless the premium is not paid. As with all life insurance, guaranteed issue policies include a 30 day grace period for the payment of premiums. This means that you have 30 days after the premium due date to make the payment before your policy is cancelled. Insurance companies are required to send you a notice that you must pay the premium by the end of the grace period or your life insurance will be cancelled. If you were to die during the grace period, the benefit will still be paid to your beneficiary less the amount of premium that is due to the insurance company. The grace period protects against someone losing their life insurance coverage due to accidentally missing a premium payment.
Guaranteed Life policies are usually whole life which means that as long as the premiums are paid, you are covered for life and never need to re-apply regardless of your age or health. This is an important feature for anyone over 65. As your age increases it becomes more difficult to qualify for life insurance coverage and the cost of life insurance quickly increases for anyone over age 70.
In addition whole life insurance policies build cash value. Cash value or cash surrender value is the amount the insurance company will pay you to cash in your life insurance policy. This amount is calculated based on the number of years you have had the policy and the amount of premium paid. Once the policy is cashed in (surrendered) you receive the cash, and the life insurance policy is cancelled. This is an important feature in case you need cash and decide that you no longer need life insurance. Insurance companies may also allow you to borrow up to the amount of the cash value.
As with all life insurance, the death benefits paid on a guaranteed life insurance policy are income tax free to the beneficiaries. Although rules for each state vary, the federal government does not tax life insurance benefits.
Many insurance companies sell Guaranteed Life policies including Colonial Penn, Met Life and Mutual of Omaha. You can apply online for coverage or call toll-free to apply by phone. You don’t even need to meet with an agent. In fact while there are agents that specialize in final expense policies, more and more policies are sold over the phone and online. Insurance companies offering Guaranteed Life policies will typically provide both a toll free number for phone applications and an online application
The application only requires the basic personal information: name, address, date of birth, social security number and the amount of coverage desired. As discussed above, the amount of coverage available will be determined by the insurance company based on the age and sex of the person applying. Generally speaking, coverage is not available to individuals over 80 years old.
The applications will usually offer an automatic premium payment option. This option authorizes the insurance company to withdraw the premiums directly from the account specified by the applicant. This is usually a checking account but can also be a credit card account. By taking advantage of the automatic premium payment option, the insured person greatly reduces the possibility that the insurance will be cancelled due to a missed premium payment. While the 30 day grace period would prevent the insurance from being cancelled immediately in the event of a missed payment, this option can eliminate the stress that comes from missing a payment.
Guaranteed Life Insurance policies offer convenience and a no hassle application process. For people that want to take care of their funeral cost and final expenses without answering health questions or having a medical exam they can be a great option.
Guaranteed Life Insurance policies do not require underwriting. These policies are issued regardless of an applicant's health, occupation, driving record or other risk factors. In other words the policy is guaranteed to be issued as long as the application is completed and the premium is paid. As with any life insurance, the premium increases with the age of the applicant. So a 75 year old will pay more for a guaranteed life policy than a 55 year old. However an applicant with serious health issues will pay the same premium as a healthy applicant of the same age.
Since no health questions are asked, No medical exam is required, and everyone that applies is accepted, these policies have a graded benefit period. This means that during the first two years of coverage, the full benefit is only paid for accidental death. If an insured person dies of disease or illness, in the first two years of coverage, the benefit is limited to the premium paid. After the first two years, the full benefit amount is paid for death from any cause including illness, accident, or natural causes.
Guaranteed Life Insurance policies are often a good option for people with health issues, since they are likely to be turned down for standard term and whole life policies. As long as they are within the eligible ages, they cannot be turned down or cancelled for a guaranteed life policy unless the premium is not paid. As with all life insurance, guaranteed issue policies include a 30 day grace period for the payment of premiums. This means that you have 30 days after the premium due date to make the payment before your policy is cancelled. Insurance companies are required to send you a notice that you must pay the premium by the end of the grace period or your life insurance will be cancelled. If you were to die during the grace period, the benefit will still be paid to your beneficiary less the amount of premium that is due to the insurance company. The grace period protects against someone losing their life insurance coverage due to accidentally missing a premium payment.
Guaranteed Life policies are usually whole life which means that as long as the premiums are paid, you are covered for life and never need to re-apply regardless of your age or health. This is an important feature for anyone over 65. As your age increases it becomes more difficult to qualify for life insurance coverage and the cost of life insurance quickly increases for anyone over age 70.
In addition whole life insurance policies build cash value. Cash value or cash surrender value is the amount the insurance company will pay you to cash in your life insurance policy. This amount is calculated based on the number of years you have had the policy and the amount of premium paid. Once the policy is cashed in (surrendered) you receive the cash, and the life insurance policy is cancelled. This is an important feature in case you need cash and decide that you no longer need life insurance. Insurance companies may also allow you to borrow up to the amount of the cash value.
As with all life insurance, the death benefits paid on a guaranteed life insurance policy are income tax free to the beneficiaries. Although rules for each state vary, the federal government does not tax life insurance benefits.
Many insurance companies sell Guaranteed Life policies including Colonial Penn, Met Life and Mutual of Omaha. You can apply online for coverage or call toll-free to apply by phone. You don’t even need to meet with an agent. In fact while there are agents that specialize in final expense policies, more and more policies are sold over the phone and online. Insurance companies offering Guaranteed Life policies will typically provide both a toll free number for phone applications and an online application
The application only requires the basic personal information: name, address, date of birth, social security number and the amount of coverage desired. As discussed above, the amount of coverage available will be determined by the insurance company based on the age and sex of the person applying. Generally speaking, coverage is not available to individuals over 80 years old.
The applications will usually offer an automatic premium payment option. This option authorizes the insurance company to withdraw the premiums directly from the account specified by the applicant. This is usually a checking account but can also be a credit card account. By taking advantage of the automatic premium payment option, the insured person greatly reduces the possibility that the insurance will be cancelled due to a missed premium payment. While the 30 day grace period would prevent the insurance from being cancelled immediately in the event of a missed payment, this option can eliminate the stress that comes from missing a payment.
Guaranteed Life Insurance policies offer convenience and a no hassle application process. For people that want to take care of their funeral cost and final expenses without answering health questions or having a medical exam they can be a great option.